Agenda item

A report of the Director of Finance was presented to the Board on items scheduled in the work plan for consideration at the current meeting.

Annual Review of Board Training

In March 2021, the Pension Fund Committee agreed to a training programme following the participation in the National Knowledge Assessment.  This was set out in Appendix B to the submitted report.

Some areas of the plan had been covered previously, including Environment Social and Governance (ESG) issues and McCloud.  Other areas remained to be addressed – in particular the role of pension administration.  This could be picked up through working with colleagues in XPS Administration.  There had been significant changes of membership at the Board and consequently some issues and training areas might need to be revisited, either through the induction training for new members or through ongoing training.

Since 1 June 2022 Pension Fund Committee and Teesside Pension Board members have been able to access Hymans Robertson’s Local Government Pension Scheme (LGPS) Online Learning Academy which was intended to cover all of the ‘knowledge and understanding’ requirements that Board members were legally required to obtain (and Pension Fund Committee members were strongly encouraged to obtain).  A lot of topics covered within the Learning Academy and it was recommended that Members set aside some time each week to work through them at their own pace.   It was intended that the Learning Academy would form a key aspect of training delivery for the Board and the Pension Fund Committee.   As with all training, participation and feedback would be key to ensuring it was useful effective and relevant.

Regulator Code of Practice Gap Analysis

In July 2018 the Fund commissioned AON to carry out a comprehensive assessment on compliance against Code of Practice 14. The outcome was reported to the 23 July 2018 Board meeting.  Overall compliance was assessed as good, although several areas for development or further consideration were identified.  These were listed in the table at paragraph 6.4 of the submitted report alongside comments on progress since that assessment was made.

The Pensions Regulator consulted last year on significant changes to the content and format of its various codes of practice.  An interim consultation response was issued on 24 August 2021, however, the final version of the ‘single code’ had not been published. 

Based on the initial consultation and the response to this, it looked likely that pension schemes would have the following additional requirements under the single code of practice:

•           Establish an “effective system of governance” (ESOG).

•           Carry out an “Own Risk Assessment” (ORA).

•           Have a written remuneration policy.

•           Write a policy on the appointment of advisors and service providers.

•           Consider climate change in their governance systems.

•           Build robust cyber security systems.

In addition to the imminent changes expected to the Pensions Regulator’s Code of Practice, the government had also recently indicated that it would be implementing the LGPS Scheme Advisory Board’s ‘Good Governance’ recommendations.

In the light of the proposed changes expected to both the Code of Practice and the LGPS regulations or guidance covering the governance of the scheme, it made sense to carry out a further gap analysis to consider how the Fund complied with the expected regulations and where development was required.  As these changes were not implemented or documented in their final form it would be more cost-effective to commission any assistance with this analysis once the final format of the new Code of Practice and Good Governance arrangements had been made public.

Review the outcome of Actuarial Reporting and Valuations

The latest triennial valuation of the Fund (as at 31 March 2022) was currently in progress. Reports have been brought to the last and the current Board meeting outlining progress – these have been in the private agenda owing to commercial sensitivity around draft information and the intellectual capital contained in the reports. The Board would be kept informed throughout the valuation process, with the final report due to be published by the end of March 2023.  The Board would have the opportunity to discuss the final valuation outcome and report at the April 2023 meeting.

It was suggested that an area for future consideration for Board Members’ training was the topic of Cyber Security.

AGREED as follows:

1.   that the information provided was received and noted.

2.   Cyber Security would be added to the Board’s Work Plan for consideration at a future meeting.